Britain braces for Brexit no-deal
December 14, 2020 08:37 PM
Prime Minister Boris Johnson has said Britain should prepare for a "no-deal" Brexit, even as UK and EU negotiators indicated a last-minute free trade agreement could be reached.
With just over two weeks to go until Britain leaves the EU single market, preparations have been stepped up as fears grow about the impact of customs checks and congested ports.
A no-deal would mean Britain trading with the EU on World Trade Organization terms, with tariffs and quotas.
"The most immediate impact arising from a no-deal is likely to be food supplies, where there probably will be some shortages and some price rises," Jonathan Portes, professor of economics and public policy at King's College, London, told AFP.
With supply chains uncertain, the British Retail Consortium trade association said Sunday that supermarkets were increasing stocks of tinned goods, dried pasta and toilet rolls.
Concerns is rising over the supply of perishable fresh fruit and vegetables, much of which is imported from EU countries.
Justin King, former boss of supermarket giant Sainsbury's, told BBC radio on Monday that "fresh food can cope with a blip", but not "persistent, pervasive delays.
"That's the thing people are worried about."
New customs checks on goods moving between Britain and the EU will put huge pressure on ports and the surrounding roads.
The government has carried out dummy runs as part of its two contingency plans, Operation Brock and Operation Fennel, for Kent, southeast England.
Under Operation Brock, moveable road barriers will be used to separate normal traffic from lorries to keep major roads flowing into ports such as Dover and Folkestone, and the Channel Tunnel.
Up to 7,000 lorries could end up log-jammed, according to official planning figures, and if there are more than 2,000 queued up, the government has made plans for several temporary lorry parks.
Operation Fennel will kick in if the congestion becomes more serious, and allows for 7,000 heavy goods vehicles to be diverted to a disused airfield.
Business have been urged to plan for a no-deal and secure supply chains.
But as talks drag on, they are still in the dark about how trade will be conducted with Britain's biggest export market.
"There are two sorts of uncertainty," said Portes.
"One is uncertainty about what the rules are, and another uncertainty is about whether, actually, the new systems that are being put in place are going to be up to the job.
"The best guess at the moment is that there will be some disruption but it won't be catastrophic.
"However, deal or no-deal, the medium- to long-term economic consequences of major new trade barriers with the EU are going to be very significant."
Britain will no longer be part of the European Common Aviation Area, which allows airliners to fly between Britain and the EU, in the event of a no deal.
The European Commission has proposed a six-month deal to allow flights to continue but Britain has not yet responded.
A totemic issue during talks, despite representing only a fraction (less than 0.1 percent) of Britain's economy, fishing threatens to be a flashpoint should negotiations break down.
Britain will regain full control of its fishing waters without a deal, and has readied armed Royal Navy patrol vessels to police the coast against EU trawlers.
The European Commission proposed extending the deadline to reach a fishing deal until the end of 2021, allowing fishing in each other's waters for another year.
But Britain has said it "would never accept arrangements and access to UK fishing waters which are incompatible with our status as an independent coastal state".
New customs checks between EU member Ireland and the British province of Northern Ireland threaten the reimposition of a "hard border", which is feared will disrupt the terms of the peace agreement reached in 1998 following decades of violence.
Britain and the EU last week reached an "agreement in principle" on issues including border control posts and the supply of medicines, although details have not yet been published.
Britain has told pharmaceutical companies to stockpile medicines and plan alternative supply routes in case of border disruption.
Foreign Secretary Dominic Raab on Sunday told the BBC that Britain had "enough diversity of supply" to cope.
But the head of the Association of the British Pharmaceutical Industry has warned that no-deal would lead to "increased complexity, duplication and cost".